Private fundraising for clean-energy startups fell by more than 40% from a year ago.
The drop has been caused by factors such as higher interest rates, a broader slowdown in private equity dealmaking, and regulatory uncertainty regarding new subsidies for green technologies in the U.S.
Climate startups raised just $8.04B in Q1 2023, down from $12.4B a year earlier.
- The first three months of 2023 were the weakest quarter for climate tech private fundraising since 2020.
- PJ Deschenes of the climate-tech-focused investment bank Nomura Greentech suggested that dealmakers have shaped the downturn by making smaller investments or not investing altogether.
- Regulatory uncertainty over what technologies will qualify for green-tech tax credits in the Inflation Reduction Act also contributed to the slowdown.
Zoom Out:
- The slowdown has not been universal. Private equity fund Brookfield Asset Management raised $15B for its first energy transition fund in mid-2022.
- Brookfield, which is raising its second energy transition fund, recently bought out the remaining half of Madrid-based renewable developer X-Elio.
